Dutch Job Contracts
There are a few types of employment contracts in the Netherlands. Before seeking a job, understand the differences between temporary, permanent and employment agency contracts…
Temporary Contract
This labor contract is temporary in nature or an agreement between an employer and employee that is not continuous. Both parties are required to conform to the stipulation of the temporary contract. The employee provides services while the employer provides compensation for these services. A temporary contract includes a start date and an end date (the date the contract terminates). Upon the contract’s completion, the relationship between the two parties is severed and there is no dismissal process involved.
It is normal for a temporary contract to have a trial period. This is also executed in writing. A temporary contract with a duration less than 2 years will have a maximum 1-month trial period (unless specified otherwise in a collective labor agreement). Temporary contracts of longer duration can have a trial period of up to 2 months. Postponement of the trial period is not admissible.
If either party wants the flexibility to end the contract before the expiration date, it needs to be stipulated in the contract. If this is not stipulated, and the employer wants to terminate the contract before the agreed expiration date, the employer must abide by the dismissal process set forth in Dutch labor law. It is recommended to contact the Employment Office (UWV) in these circumstances.
A temporary contract is executed in writing and should include all major requirements and responsibilities assigned to each party. Both parties are allowed to agree what will be included in the contract as long as it is within the bounds of the law.
For repeated temporary contracts of the same employers, the law for a permanent contract must also be observed.
Permanent contract
A permanent labour contract generally has no expiration date.
Either party can end a permanent contract but lawful terms of the notification must be considered. For the employee, the legal requirement to end a permanent contract is one month notice. The employer has to apply for an expulsion permit. The period of notification must be contingent on the length of the contract on the day the employer applies for a dismissal permit.
It is always recommended to contact the Employment Office (UWV) when a permanent contract is being terminated. If the contract is being terminated with a severance package, it is recommended to verify the tax implications with a certified Dutch tax consultant.
Employment Agency Contract
A contract with a temporary agency or commercial employment agency (Uitzendbureau) is different from other types of employment contracts. In this situation, the temporary agency is the lawful employer even though a worker is providing a service to a third party. Dismissal through a temporary period may be immediate rather than a long process. A worker is also allowed to leave with little to no notice through the same period.
A temporary agency observes a Collective Labour Agreement, also known as a CAO in Dutch. This agreement governs the working conditions required in a given industry. Employment by temporary agencies is regulated by the Allocation of Workers by Intermediaries Act. Temporary agency employers are forbidden from charging temporary employees any fees. Employment agencies must provide the worker with information about the duties the third party requires prior to starting work.
More information on Collective Labour Agreements in the Netherlands from the Dutch government website.
Freelance/ZZP-ers
An increasing number of people in the Netherlands have become self-employed.
The term self-employed is synonymous with freelancer or ‘ZZP-er’ (zelfstandig zonder personeel), which means self-employed without employees or staff. To become self-employed, it is mandatory to register the business with the Kamer van Koophandel (Dutch chamber of commerce).
A sole trader (ZZP-er) is the only owner of the company. There are advantages to being a ZZP-er, such as related tax allowances if certain conditions are met. Profits generated by the company are allocated to the owner as income. The main risk associated with being a ZZP-er is the personal liability it assumes; no difference is made between personal and business assets. Personal or business creditors can lay claim to assets (whether those assets are of a personal or business nature).
Related information…